Types of Decisions

Decisions are very important part in life; we take decisions at every moment in daily routine. If we choose a TV program to watch among several programs it means we took decision about which program to watch.

Decision is a choice made from available alternatives.

There are two types of decision:
• Programmed Decisions
• Non-programmed Decisions

Programmed Decisions

It involves situations that have occurred often enough to enable decision rules to be developed and applied in the future. These decisions are those that have been made persistently in the earlier period that managers have developed rules or guideline to be applied when certain situations are expected to happen. Programmed decision making is used when an inventory manager of mc Donald’s decides to order beef patty stocks because the stocks are three-quarters empty. Programmed decisions making are a routine that you make every time so that the organization run smooth. Managers can develop rules and guidelines to regulate all routine organizational activities. Most decisions are related to daily activities.

In programmed decision making there will be no error in the decisions because it is a routine and managers usually have the information they need to create rules and guidelines to be followed by others. But sometimes it can cause error but not of big kind. Programmed decision making are always used in daily routine to keep the organization running smooth. That is why they have rules and guidelines to make a decision.

Non Programmed Decisions

[adsense1]Non-programmed decisions are made in response to situations that are unique, are poorly defined and largely unstructured. Non-programmed decision making is used when mc Donald’s are deciding to invest in new deep fryers. It is a non-routine decision making. This means it is made for big decisions that will affect an organization for a long time. This type of decision making does not need rules or guidelines to be followed because the situation is unexpected or uncertain. For example if mc Donald’s plans to launch a new line of menu, they will have to make decision base on their intuition and reasoned judgments.

Non-programmed decision has more chance of errors and difficult for managers to handle as it is inherently challenging. Managers must rely on their intuition to quickly respond to a urgent concern. Also these errors are of dangerous kind, they affect organization badly. For example if mc Donald’s decided to invest in a new menu. Their customers did not like the new menu and they do not consume mc Donald’s anymore. This will affect mc Donald’s revenue and profit.Non-programmed decision making are not always used but it will give impact to an organization’s effectiveness. This decision is made on reasonable judgment and the circumstances if we proceed with the decision.